JSE in the Cross Hairs (and Proposing Changes) | Don't Fight the Trend
Description
Worldwide Markets – Episode 656 (12 November)
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1) JSE Under Pressure 🏛️⚖️
Two issues in the spotlight:
a) Competition Commission Complaint
A2X alleges JSE is being anti-competitive around BDA & settlement. This could have a long regulatory process. No quick outcomes expected.
b) Matengu Allegations
Matengu alleges share price manipulation and claims to have emails implicating JSE directors.
- JSE has fired back and asked: Produce the emails.
- There is also a clear seller overhang (ex-director wanting out), which explains the price pressure more plausibly.
Takeaway: Overhang selling often looks like manipulation. But without proof, it's just selling pressure.
2) Should We Scrap SENS Announcements & HEPS? 🤔📰
The JSE is consulting on two potential changes:
- Reduce some SENS announcements (e.g., administrative ETF notices, floating rate resets, etc.)
- Possibly remove HEPS (Headline Earnings Per Share)
Simon's view:
🚫 Do not remove HEPS.
HEPS is invaluable as an adjusted earnings measure, especially in SA where one-off corporate events are common. The process cost argument doesn't justify removing a critical metric.
4) Don't Fight the Trend 🟢📈
Two strong trends right now:
a) Gold 🥇
- Back above $4,100/oz after two brief red weeks.
- Long-term trend still strongly up.
- No point trying to call tops – enjoy the trend while it runs.
b) Rand 🇿🇦💪
- Strengthening since the "liberation blowout" in April (~19.90).
- Now around R17.14 – and trend still down (strengthening).
- This is not just USD weakness.
- Big inflows into SA bonds + stronger commodity prices supporting.
Next key level: R17 → If broken, expect move to low R15s.
5) Results Round-Up 📊💼
| Company | Sector | Key Takeaways | Outlook |
|---|---|---|---|
| Stor-Age* | REIT / Self-storage | SA strong, UK okay. Trading near NAV (R17.77). Yield ~7%. | Fairly valued, solid operator. |
| Premier Group | Bread, food manufacturing | Revenue +6%, HEPS +27%. Efficiency gains + declining input costs. | Not cheap, but high quality compounder. |
| GE Aerospace (formerly General Electric) | Aviation Engines & Service | 75% of commercial planes use GE turbines. Service business = high margin recurring revenue. | Trend beneficiary as global travel grows. Expensive, but maybe deserved. |
6) KAP (PG Bison, UniTrans, beds, auto aftermarket) 🛏️🚚🛠️
- Earnings slump → PE looked blown out, but forward expectations show return to single-digit PE once capex is absorbed.
- Small-caps remain deeply unloved.
- Worth watching, but needs a catalyst.
7) Gold Miners – Pick Your Favourite ⛏️✨
If gold keeps running, most producers will make serious money.
Simon's preferences:
- AngloGold Ashanti* (ANG) – strong price action, holding trends well.
- Pan African (PAN) – up 7x since Oct 2022.
Others:
- Harmony – now has meaningful copper exposure.
- Sibanye* – gold + PGMs.
ETF option: Satrix RESI* – doubled this year (helped heavily by gold).
⏳ How long to hold?
While gold trend remains intact.
Events & Dates 🗓️
- Monday 17 November @ 10:00 – 91 Income ETFs webcast
Book: justonelap.com/events - Friday 8 December – Final Power Hour:
"Position Your Portfolio for 2026"
Bookings open next week.
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